The Nifty 50 rebounded after range-bound trading to rally 0.7 percent on October 26, marking a positive start to the week after losing 2.4 percent in the previous week. The recovery came ahead of the monthly F&O expiry scheduled for October 27. The formation of a Tweezer Bottom-like pattern near 22,380, close to the 200-week EMA, raised hopes of a potential trend reversal and a recovery in bullish momentum.

However, sustained buying interest above the immediate resistance zone of 22,800–22,850, near the 20-day EMA, is needed to strengthen the recovery. The next crucial resistance lies at 23,200. Until the index breaks above these levels, further consolidation and range-bound trading cannot be ruled out, with 22,400 remaining a crucial support level, according to experts. The broader technical structure remains weak, as the index continues to trade below all key moving averages—the 20-day, 50-day, 100-day and 200-day EMAs.

Meanwhile, Brent crude oil futures continued to trade above the $100-a-barrel mark. The Nifty 50 opened lower at 22,524 and declined to an intraday low of 22,387 in the first hour of trade, close to Friday's low. The index subsequently recovered and traded within a narrow range. Buying interest strengthened after 1 pm, helping the benchmark close at 22,753, up 153 points, or 0.68 percent. On the daily chart, the index formed a long bullish candle with a noticeable lower wick, indicating a recovery from lower levels and improving buying interest.

The candlestick patterns of the last two sessions suggest the formation of a Tweezer Bottom-like pattern, although it is not a classical formation. "The bounce back of Monday signals a possible higher bottom reversal pattern around 22,400 levels. Further sustainable upside could confirm this reversal pattern," said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. According to Shetti, a decisive move above 22,800–22,850 could confirm a short-term reversal pattern and potentially attract further buying interest.

However, any weakness could find immediate support around 22,550. Monthly options data indicate that the 23,000 strike, which has the highest Call open interest, could act as a crucial resistance level for the Nifty 50. The 23,100 and 23,200 strikes are likely to be the next resistance zones. On the downside, the 22,500 strike, which has the highest Put open interest, is likely to provide key support.

The 22,600 and 22,400 strikes could offer additional support. Meanwhile, India VIX, the market's fear gauge, rose 1.78 percent to close at 17.16, its highest closing level since May 22. The index has continued to move higher since last week, signalling elevated caution among market participants and posing a challenge to bullish sentiment. The Bank Nifty broke below its September low in early trade and touched an intraday low of 53,775.5.

However, the index recovered and subsequently traded within a range. It ended the session at 54,367, up 79 points, or 0.15 percent, forming a Hammer-like candlestick pattern, although not a classical one. The pattern indicates buying interest at lower levels. A Hammer-like formation can signal a potential trend reversal, but confirmation in subsequent sessions through sustained upward movement is necessary.

The broader technical structure remains weak, as the index continues to trade well below all key moving averages, which are also sloping downward. "Going ahead, the 53,800–53,700 zone is expected to act as a crucial support area, as the previous swing low is positioned in this region. As long as the index sustains above 53,700, the short-term bias is likely to remain positive," said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. On the upside, Bank Nifty could witness a pullback towards the 55,000 level initially, followed by 55,600 in the near term, he added.